Gary Cohn: Dodd-Frank Reform on First-Quarter Agenda
With tax reform successfully passed, one of the next economic priorities on the Trump Administration agenda is Dodd-Frank reform. The Dodd-Frank Wall Street Reform and Consumer Protection Act was put in place following the Financial Crisis to reduce predatory lending practices and irresponsible banking activity. Despite economic recovery, the legislation remains unchanged since its establishment in July 2010. Opponents of Dodd-Frank contend that its policies are too restrictive and are hindering economic growth. Supporters of Dodd-Frank assert the legislation is necessary to ensure the Financial Crisis does not repeat itself. In an interview with Bloomberg News, White House chief economic advisor Gary Cohn suggested that Dodd-Frank reform could pass as soon as the first quarter of 2018.
In last Friday’s Bloomberg News interview, Cohn said, “we are making enormous progress on a bipartisan basis on bank deregulation. We’ve got a bill in the Senate that has bipartisan support to really change the regulatory environment for the vast, vast majority of banks in the United States.”
The bill he is referring to is a bipartisan legislation sponsored by Senator Mike Crapo (R-Idaho). In December, the Senate Banking Committee approved the bill in a 16-7 vote. In addition to the support of Senate Majority Leader Mitch McConnell (R-KY), at least a dozen Democrats have also pledged their support. Senator Crapo’s bill focuses on small and mid-size banks and exempting them from some of the costly regulatory burdens and reducing federal oversight. Under the bill, there would be no changes to the Consumer Financial Protection Bureau (CFPB), a point of contention between Democrats and Republicans. Most Democrats are supportive of preserving the CFPB and most Republicans are in favor of restructuring the agency.
As part of his campaign, President Trump promised sweeping Dodd-Frank reform. Cohn expects the Senate bill to see “floor time” in January and pass the House within the next three months.
Sources: Bloomberg, The Hill